BUSINESSWEEK ONLINE : FEBRUARY 28, 2000 ISSUE
COVER STORY The Cendant Saga Savvy dealmaker Silverman built HFS into a giant franchiser of brands such as Century 21, Ramada, and Avis. His merger with CUC was to have been his masterstroke. But that dream evaporated in April, 1998, with revelations of accounting irregularities 1990 Henry Silverman buys the Ramada and Howard Johnson brands. 1992 After taking HFS public, he adds brands like Super 8 Motels and real estate brokerage Century 21. 1997 HFS merges with CUC International, marketer of discount membership clubs, to form Cendant. Silverman becomes CEO, and CUC chief Walter A. Forbes becomes chairman. They agree to swap jobs in 2000. APRIL 1998 Cendant stock reaches all-time high of 41 3/8. Days later it drops 46% when company reveals that CUC may have inflated earnings by up to $115 million. That triggers investigations by the SEC and U.S. Attorney in Newark. JULY 1998 The problems worsen when Cendant reveals that the '97 reduction could reach $250 million. Forbes resigns, taking a severance package of $35 million and options valued at $12.5 million. Nine Forbes allies resign from the board. AUGUST 1998 Cendant completes its investigation, which finds CUC's income was inflated by $500 million pre-tax from 1995 through 1997. Accounting errors overstated income by an additional $200 million. OCTOBER 1998 Stock hits a low of 7 1/2. Silverman later tells shareholders he'll focus on selling businesses and buying back shares. 1999 Cendant sues Ernst & Young, former auditor for CUC, accusing it of ''gross negligence,'' and strikes deal to settle a shareholder class action for $2.8 billion. Later, Liberty Media buys Cendant shares and warrants for $400 million, and Chairman John Malone will join Cen-dant's board. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP					RELATED ITEMS Henry Silverman's Long Road Back COVER IMAGE: The Long Road Back TABLE: Silverman's Three-Step Plan TABLE: The Cendant Saga CHART: Cendant's Wild Ride TABLE: Cendant's Brand Portfolio RESUME: Henry R. Silverman ``Just Going About His Business'' ONLINE ORIGINAL: Silverman: "The Scars Will Be with Me ONLINE ORIGINAL: Is It Safe Yet to Buy Cendant? INTERACT E-Mail to Business Week Online

Copyright 2000-2009, by The McGraw-Hill Companies Inc. All rights reserved. Terms of Use   Privacy Notice